What is an OIDAR service exactly?Both the following conditions must be satisfied to be a OIDAR service. If one is not satisfied, the service is not OIDAR.
- Delivery is mediated through internet.
- The supply is essentially automated involving minimal human intervention and impossible without information technology.
- Advertising on internet
- Providing cloud services (Google Drive)
- Provision of e-books, movie, music, software and other intangibles via internet (Hotstar, Amazon Prime Video)
- Providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network;
- Online gaming (Steam)
- Supplies of goods, where the order and processing is done electronically
- Supplies of physical books, newsletters, newspapers or journals
- Services of lawyers and financial consultants who advise clients through email
- Booking services or tickets to entertainment events, hotel accommodation or car hire
- Educational or professional courses, where the content is delivered by a teacher over the internet
- Offline physical repair services of computer equipment
- Advertising services in newspapers, on posters and on television
It has also been clarified that using the internet to communicate or facilitate service does not always mean that a business is providing OIDAR services.
Applicability of GST for OIDAR Services
|Location of Supplier of service||Location of recipient of service||Taxability||Forward Charge/ Reverse Charge||Examples|
|India||India||Yes||Forward Charge||Hotstar (registered in India) allows Indian users to register and watch movies. GST is payable by the Indian users|
|Outside India||India Recipient: Registered||Yes||Reverse Charge (GST payable by the recipient)||An Indian Co.(registered) asks BlueHost (US) for web hosting services. GST is payable by the Indian Co. under RCM.|
|Recipient: Non-Taxable Person||Yes||Forward Charge (GST payable by the service provider)||A student in India registers in Netflix (US) for watching movies. Netflix has to pay IGST.|
|India||Outside India||No (Export of service)||NA||Hotstar allows foreigners to register and watch movies. GST is not applicable as it is an export of service|
|Outside India||Outside India||No (Not covered under GST)||NA||Netflix (US) provides online movie streaming services to people in US. This is not covered in Indian GST.|
Who will register and pay GST for OIDAR services when the service provider is located outside India?In respect of import of online information and database access or retrieval services (OIDAR) by unregistered, non-taxable recipients, the supplier located outside India will be responsible for payment of taxes. The service provider (or intermediary as the case may be) will be required to take a single registration for paying IGST under the Simplified Registration Scheme to be notified by the Government. Either he will have to take registration or he will have to appoint a person in India to pay GST. Read here for registration process of OIDAR
Does reverse charge apply in OIDAR services?The person receiving any such services i.e. OIDAR should pay the IGST to the government only if he is registered under GST as a taxable person.
Why does OIDAR service require a treatment different from other services?The peculiarity of OIDAR service is that it can be provided online from a remote location outside India.
- If a similar service is provided by an Indian Service Provider, from India to recipients in India then such service would be taxable.
- If such services are received by a registered entity in India then GST will be payable under reverse charge.
Place of supply for OIDAR
What is the place of supply for OIDAR?
|Supply||Receiver||Place of supply|
|Supply of online information and database access or retrieval services||Any person||Location of the recipient of services|
How to determine the location of the recipient?For this service, the recipient will be deemed to be located in the taxable territory (i.e., in India) if any two of the following conditions are satisfied-
- Location of address presented by the recipient through internet is in India
- Credit card or debit card (or any other card such as store value card) which the recipient uses to pay is issued in India
- Billing address of the recipient of services is in India
- IP address of the device used by the recipient is in India
- Bank of the recipient’s account used for payment is maintained is in India
- Country code of the subscriber identity module card used by the recipient of services is of India
- Location of the fixed land line through which the service is received by the recipient is in India.
- prevent double taxation
- prevent non-taxation of the supply of a service
- for the uniform application of rules
Special provision in case of a service provider outside India and a non-tax-payer in India
|Supply||Service provider||Receiver||Who is liable to pay IGST?|
|Supply of online information and database access or retrieval services||Any person located in a non-taxable territory||Non-taxable online recipient||Supplier of services located in a non-taxable territory|